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Central Banks Can't Ignore the Cryptocurrency Boom (bloomberg.com)
The boom in cryptocurrencies and their underlying technology is becoming too big for central banks, long the guardian of official money, to ignore. From a report: Until recently, officials at major central banks were happy to watch as pioneers in the field progressed by trial and error, safe in the knowledge that it was dwarfed by roughly $5 trillion circulating daily in conventional currency markets. But now as officials turn an eye toward the increasingly pervasive technology, the risk is that they're reacting too late to both the pitfalls and the opportunities presented by digital coinage. "Central banks cannot afford to treat cyber currencies as toys to play with in a sand box," said Andrew Sheng, chief adviser to the China Banking Regulatory Commission and Distinguished Fellow of the Asia Global Institute, University of Hong Kong. "It is time to realize that they are the real barbarians at the gate." Bitcoin -- the largest and best-known digital currency -- and its peers pose a threat to the established money system by effectively circumventing it. Money as we know it depends on the authority of the state for credibility, with central banks typically managing its price and/or quantity. Cryptocurrencies skirt all that and instead rely on their supposedly unhackable technology to guarantee value.
If the blockchain is "hacked" or there is a successful 51% Attack then yes BTC and other crypto are in big trouble.
However the blockchain was not hacked at $1,000,000.00 dollars, and it wasn't hacked when it was 1000 times that amount (1 billion) and it's still not hacked now. So far so good.
Re 51% attack - that's getting pretty close to impossible even for governments.
Can government stop crypto? Of course. Make it illegal and shoot people who have (or are suspected to have BTC). That ought to work.
You talk about one major exploit - true. But, of course, if people could counterfeit US dollars that would also tank the dollar. Right?
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
Forbes just published an article calling BTC the new gold standard.
Bitcoin is the New Gold
https://www.forbes.com/sites/p...
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
You missed the fact that the brokers have been hacked, time and time again, but then again banks seem to like leaving our details out anyway, so they are hardly who I'd turn to for trust worthy storage either ;)
- http://www.milkme.co.uk
Whilst the headline of this article is certainly correct, it addresses only one small facet of a much larger problem with international finance. Public Ledger cryptosystems are far, far more than a form of digital cash. For example, one of the most lucrative forms of income for the big banks comes in the form of foreign currency exchanges, where it is customary to charge, for example, 2.75% "service charges" on transactions made in "non-local" currencies. Conversions from one currency to another always involve a "spread" - a difference between buying price and selling price - which is where the banks are creaming fat profits.
Cryptocurrencies introduce direct competition to this rip-off market. If it is cheaper for me to convert some of my local currency [Pounds Sterling] into Bitcoin and then, upon arrival in say the United States, covert that from Bitcoin into US Dollars - then if those conversions have significantly lower transaction fees than a conventional Bureau de Change type of deal, then they offer a fantastic and useful market-disrupting alternative.
An even more useful application of Bitcoin technology is the ledger itself. When transactions are conducted in a publicly-shared ledger, then it is possible for entities to exchange funding without actually needing a central bank at all. Most of the big banks are already looking at the "public ledger" aspect of the technology - not necessarily to start offering Bitcoin exchanges in high street branches, but to look to cut out central agencies like SWIFT and CLS and their kind.
Interestingly, the central clearing banks (Federal Reserve, Bank of England, ECB, etc) could themselves be replaced by a public ledger for much of the daily transaction volumes that privately held banks (your JPMorgans and Barclays of this world) actually need. So maybe the central banks are looking to regulate cryptocurrency and related technologies as part of a move in self-preservation?
I wager 200 quatloos on the newcomer.
THIS^^^
Inherently, there is no reason for bitcoin to be valuable. There is also no reason for gold certificates to be valuable. Bitcoin is valuable among other reasons because people literally use it as a gold standard to trade all other coins. Look at the bittrex exchange: every coin is traded against bitcoin (and ethereum). It is quite literally the digital gold backing all other coins.
Crypto is very volatile, but as the total crypto market cap increases, so will the bitcoin price. And I predict that over the long term, bitcoin is going to go up as long as people keep buying other coin. At least, until and as long as bitcoin remains the gold standard. 2018 could very well have 5 digit bitcoin prices.
The only reason that bitcoin crashed a couple years back is because Mt. Gox folded and many people lost all their coin and the trust in crypto.